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SABMiller posts early 2009 lager decline

By Neil Merrett , 16-Apr-2009
Last updated the 16-Apr-2009 at 14:31 GMT

SABMiller says the economic downturn is beginning to have a noticeable impact on its operations as consumer demand for its lager brands has tailed off from the start of this year.

In a trading update for the fiscal year ending 31 March, the company said that, although lager volume sales were up by two per cent on an organic basis over the same period in 2007, consumer spending had nonetheless fallen in most of its global markets in 2009.

“Economic conditions deteriorated in the second half and consumer demand has fallen in most markets, particularly in the fourth quarter,” stated the company.

A growing number of multinationals have stressed during the coming year that, even in seemingly more high growth emerging markets like Eastern Europe, beer sales were expected to remain stagnant at the very least.

In looking ahead at predictions for 2009, one financial analyst said last month that claims by some brewers suggesting Eastern European demand for beer would remain flat seemed ambitious. The group claimed that single digit falls in sales were more likely to occur during the next nine to 12 months.

The analyst, which asked not to be named due to its work with the brewing industry, told BeverageDaily.com at the time that slowing demand was being felt across the region in relation to a falling gross domestic product.

Global picture

SABMiller, which currently operates as one of the world’s leading suppliers of branded beer, said that during the final fiscal quarter, sales volumes of its lager brands were down by a single per cent

The company said that a policy of price increases for its brands had helped ensure sales had increased in organic terms on a high single digit basis, allowing it to remain in line with previously announced predictions.

Although the company said some Eastern European countries such as Poland had shown encouraging volume growth, with demand up three per cent, key areas like Russia posted a seven per cent decline in sales volumes.

Russian difficulties, which the group attributed to de-stocking of wholesaler inventories over the second and third quarters, were echoed by a four per cent volume decline in the Czech Republic.

On a Europe-wide basis, the company said that combined lager volumes were unchanged compared to the previous financial year, reflecting the impact of the economic downturn over the second half of the year.

In Latin America, volumes of lager were found to have increased during the year, despite declining during the fourth quarter on an organic basis, said the company.

For the brewer’s Asian and African operations, lager sales volumes were up by four per cent for the year, with the latter region defying global trends to post five per cent organic volume growth in the fourth quarter.

Thorough the company’s MillerCoors arm in US, sales to retailers of its brands were down by 0.4 per cent for the nine-month period ending 31 March 2009 over the same period last year.

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